Sunday, 1 May 2011

Understanding Corruption in Zambia

By Chola Mukanga

A
key feature of discussions about corruption is the tendency to treat corruption
as a uniform phenomenon. Commentators often veer unconsciously from one form of
corruption to the next without clarity. It is common to read a commentator say,
“corruption is on the increase”, without explaining what is actually meant by the
term “corruption”.

The failure to distinguish between the many forms of corruption inevitably
impacts on the quality of the public debate. In particular, it prevents
accurate retelling of history and undermines the search for effective solutions.
For example, until we understand the multi-faceted nature of corruption we won’t
be clear whether corruption is worse under the Banda administration than it was
under the Kaunda presidency. We also won’t be able to understanding the extent
to which the supposed on-going fight against corruption is succeeding.

The
Laws of Zambia (ACC Act No 42 of
1996) defines corruption as “the soliciting, accepting, giving or offering
of a gratification by way of a bribe or other personal temptation or
inducement, or the misuse of abuse of a public office for private advantage or
benefit”. This is a broad definition, with several vices falling under the
term “corruption”. This short essay
examines five of these vices as reflected in our society: bribery; public
theft; political corruption; wilful mismanagement; and, nepotism.

A culture of
bribes

The
most well known form of corruption in our society is bribery. Bribes are
offered to facilitate transactions between parties. Politicians are often
derided for suggesting that tackling corruption must start with each and every
Zambian. What they usually mean is that corruption is a moral evil that can be
prevented by anyone with a free will. Every Zambian is free to refuse paying /
accepting bribes. That Zambians engage in bribery points to the moral bankruptcy
of the nation as a whole. Bribery in Zambia is therefore not fundamentally a
political problem but a social one. We
are a corrupt people. That is not to say that politicians have not played their
role in creating and maintaining this bribery culture. Although bribery has
always been with us it has undoubtedly got worse in the last 20 years under MMD
rule. The culture of free market liberalism and emphasis on personal enrichment
coupled with signals of public theft by the elite has ushered in the so called
“Sangwapo” culture. Bribery is now not just accepted it is assumed.

The
precise scale of private bribes is always difficult to gauge. We know that one
cannot get anything done in Zambia rapidly without some form of underhand
payment, but how many bribes are paid annually? Data collection in this area
tends to focus on public officials. For
example, in 2007, surveys showedthat1 in 5 businesses expected to make informal payments to public
officials, while 1 in 3 expected to make gifts to secure government contracts.
Those figures only apply to public officials. It excludes bribes paid to other
businesses, non-government organisations and most importantly chiefs, who are
undoubtedly the largest non-official recipients of bribes.

But
are bribes damaging to the economy? The empirical evidence is mixed, but it
certainly rules out the idea that bribery is beneficial. While bribes in a very
narrow sense can speed up things and help entrepreneurs get on with wealth
creation, in a broader sense, these bribes are obstacles to development. This
is because the cumbersome procedures that bribes are supposed to help overcome
are usually created and maintained precisely because of their corruption
potential. Substantial resources are devoted to contesting the associated rents,
which in turn leads to pure waste and misallocation
of scarce resources.

Given the opportunistic nature of bribery the appropriate policy response is to
remove the “opportunity” to bribe. At the practical level it means that if we
want to stop police officers from taking bribes, we must move to eliminate the
pointless road blocks that permeate our society. Similarly, we must remove
excessive legislation that provides opportunities for businesses to bribe. Empirical
evidence appears to show a strong relationship between bribery and various
measures of excessive.

Robbing the
poor

A
key challenge in tackling bribery of course is detection. The same cannot be
said for the other form of corruption – public theft. The general public may not know which official
has greasy fingers until they are caught, but they can sense when public money
has been stolen. We have come to call this public theft “grand corruption”, to
reflect the often larger amounts of money stolen.

The
Task Force on Corruption was predicated to investigate the alleged grand
theft committed by the MMD administration between 1991 and 2001. The “grand” in
the end has not quite fitted the original billing as the main suspect, Second
President Frederick Chiluba, was subsequently acquitted of all criminal
charges.

In
recent months the theft charges have shifted to “administrative robbery”. Scandal
after scandal appears to have once again caught public imagination. The list
runs long, including the Ministry of
Health “Kapoka scandal”[i], Road Development Agency[ii], Zambia Wildlife Authority[iii],
Zambia Police[iv],
High Court of Zambia[v], Zambia Revenue Authority[vi], Ministry of Local Government[vii],
Lusaka City Council[viii], Legal Aid Board[ix]
and Water Affairs Department[x] . These and other
cases have highlighted significant levels of administrative theft perpetuated
by supposedly loyal civil servants.Indeed,
even the Task Force on Corruption was
allegedly corrupt[xi]. Like the society
at large, once again we find that the there’s a corrupt culture at every tier
of government administration.

Public theft cases continue to be met with uproar from the general public, much
more than the systematic bribery which occurs at an equally larger scale. Whilst
this may be due to poor detection of bribery, the inner sense of injustice
offers a likely reason. Zambians may be willing to accept / pay bribes because they
have erected a corrupt culture over the last two decades, but explicit public theft appears to run
counter to the principle of natural justice. It violates access to goods and
services which are inherently their right. By stealing, the official is robbing
money away from the poor in a more explicit way than other forms of corruption.
It is this aspect of public theft that causes much consternation across Zambian
society.

Not all theft causes significant national damage, at least, in the short term.
In most cases, money is merely misallocated and redistributed within the
economic system. The most damage is done through capital flight, when money is stolen and siphoned out of the
country, resulting in a drain from the economic system. Addressing this form of
corruption requires a concerted approach among countries. Unfortunately, many developed
countries have little economic incentive to prevent capital flight because they
are content to see such money lodge within their banking systems. If all stolen
money from Africa was returned many western economies would collapse.

Corrupt
politicians

Not
all stolen money is whisked abroad. Usually such money goes towards supporting politicalcorruption. Since 1991, with the dawn of multi-party politics
Zambia has witnessed an unprecedented rise in political corruption. Increased
electoral competition has given many social actors especially chiefs’
unparalleled opportunities to emerge as "kingmakers". Their place in
society allows them to trade (tribal) voting blocs in exchange for significant
sums of money, investment in chiefs’ places, new vehicles and other things
designed to capture their support.

During the 2008 presidential bye-elections, Chief MweneKahare
was rounded up with other Nkoya chiefs to meet the then MMD presidential
candidate Rupiah Banda. Unfortunately, the chief found himself lodged in cheaper
accommodation than he expected, which prompted him to voice his disappointment :
"Those who are always flying, the MMD,
had to dump us in those lodges in Kaoma
and we were even starving....In the morning, it was just an order from the
District Commissioner's office that 'you take them back'. I feel that was very
disappointing". But it’s not
only chiefs who are bought. Mr Rupiah Banda achieved fame in Katete not for co-opting chiefs but for alleged
“food based corruption”. There was general public condemnation when pictures
surfaced showing Mr Banda distributing food to potential voters.

The
Katete incident now stands as the high
point of exposing political corruption. Generally, buying the electorate either
through chiefs or directly has not attracted public disgust as other corrupt
vices. A key reason is that political corruption is seasonal. It tends to occur
only when an election is called. This effectively turns it into a “one shot
game”, with little incentive for people to report. People usually prefer to
“eat” since the opportunity does not arise often. The other reason of course is
that even when people detect political corruption, the lack of enforcement
mechanisms acts as a huge disincentive to report such activities to
authorities. As a general rule detecting and reporting corruption suffers from
a free riding problem. Why report
something that will bring you into conflict with the powers that be?

Lobbying for
poverty

A
key determinant of successful electioneering is campaign finance which is
usually sourced from multinational companies that lobby policy changes. In its
purest form lobbying is perfectly legal as it simply seeks to influence
legislators to see the merit of a given policy proposal. We all lobby
politicians all the time. The problem is the specific form of lobbying which allows people with particular
interests who represent a minority to gain special access to government, and
through monetary contributions and favours, develop controversial relationships
with government leaders or institutions. This constitutes a form of back door
corruption, which is very prevalent in Zambia.

One of the interesting historical questions is the extent to which the assumed reduction
in public theft under the Mwanawasa
administration was merely substituted by foreign lobbying. Recent empirical
evidence[xii] shows that there's
certainly influence peddling going on in Zambia by many multinational firms, which
has affected industrial competition and productivity. There’s no better example
of this than the government failure to effectively implement a fiscal regime
for the mining industry, in face of very strong arm twisting[xiii]. Mining has
always been a sphere of intense lobbying at much expense to the poor. Report
after report[xiv] catalogue the
clouds that still hang over the now abolished Development Agreements (DAs), which to date has not been lifted
through a credible public inquiry.

DAs sympathisers would of course say that the
problem was not lobbying, but poor mismanagement on part of government. The
argument is that often public officials suffer from significant asymmetric
information which puts them at a disadvantage when negotiating a deal. Edith Nawakwi typifies this posture when she
appealed to ignorance in justifying the sale of mines at giveaway prices, “We
were told by advisers, who included the International Monetary Fund and the
World Bank, that not in my lifetime would the price of copper change. They put
production models on the table and told us that there was no copper in Nchanga mine, Mufulira
was supposed to have five years life left and all the production models that
could be employed were showing that, for the next 20 years, Zambian copper
would not make a profit. [Conversely, if we privatised] we would be able to
access debt relief, and this was a huge carrot in front of us - like waving
medicine in front of a dying woman. We had no option [but to go ahead]”. No
one seriously believes Nawakwi’s poor
attempt to shift the blame on the IMF / World Bank, but it does illustrate that
often those in government are only too ready to plead incompetence rather than
the more serious charges of conniving with foreign forces to defraud the State
of Zambia.

In recent times, similar challenges have emerged for external observers or law
enforcement agencies in being able to distinguish between corruption and pure
mismanagement. In 2009, the Auditor General revealed that, “the Zambian mission in Brussels [in 2007] spent over
K1 billion on school fees, but the payments were not supported by invoices and
receipts”. Is this a case of not following proper management
practices or theft of public funds?

Another celebrated case relates to the famous purchase of hearses, which were
allegedly bought at an inflated price of $29,000 per hearse when the actual
price was only a third of the amount quoted. The late Minister Tetamashimba after much political pressure declared:
"I believe that there were irregularities in the transaction and if it
is proved that the price of the hearses was not inflated and that the terms of
conditions were adhered to, I will resign as minister on principle".
The case has now gone quiet and the public still waits to understand whether it
was a simple oversight by civil servants or a more elaborate plan to defraud
the Zambian people.

A renewed
enemy

Financial
reward is not the only motivation for corrupt activities, other considerations
usually come into play – as is the case with nepotism, the favouritism granted to relatives or friends, without
regard to their merit (tribalism, regionalism and other isms probably also fall
within the scope).

Town clerks are not headline makers, but Livingstone Town’s George Kalenga hit news headlines in 2007 when in a
letter to all heads of departments at the council, warned : “I have observed
for quite sometime now that the phenomenon of employing relations in this
council, especially those falling in the category of ‘casual’ is on the
increase….This sort of scenario is to a greater extent contributing to the poor
performance by the said category of employees who are supposed to carry out
specific duties because of our personal attachment to them”. What followed
was a surprisingly intense debate on the scourge of nepotism. Until recently nepotism
was rarely discussed in the press. Everyone knew it was there but it was not a
feature of political dialogue. The traditional nature of our society is one where
family relations often dictate economic and social arrangements in our
villages. We might even go further to say that the prevalent nature of nepotism
may well be a function of undeveloped impersonal forms of exchange. The market
has not fully taken hold at every level of our society and thus instead of
competing on merit in every sphere, we are tied to relying on family members,
etc.

In the broader scheme of things, Mr Kalenga’s
sentiments appears to coincide with a growing realisation in the Third Republic
that the destruction of the “One Zambia, One Nation” motto under the Chiluba Administration, was giving way to an
undercurrent of growing regionalism which appears to have culminated in the
emergence of the so called “family tree” under the 3rd Republican President
Levy P Mwanawasa. Mr Mwanawasa achieved
some positive things during his tenure, but undoubtedly many will also remember
his legacy, rightly or wrongly, as nepotistic. A fact he never run away from. When
quizzed publicly over his nepotistic tendencies, President Mwanawasa’s rehearsed rhetorical response was:
“do you guys expect me to appoint or help my enemies?” No, Mr President, but the public expects
you to appoint people on merit.

In
many ways nepotism is worse than other forms of corruption for three reasons.
First, as we saw under the Mwanawasa era it can give rise to worse evils. It
was during the Mwanawasa tenure that the concept of “Lambaland” emerged which
has led to rival identities developing (e.g. Bembaland, Tongaland and
Barotseland). Nepotism, regionalism and tribalism are now prevalent and are
threatening to tear Zambia’s nationhood. Nepotism unchecked therefore is an
existential threat. Secondly, nepotism substantially weakens lines of authority
and promotes incompetent people over those who are better qualified, inevitably
turning the institutions of government into personal toys. Finally, it does not
just misallocate resources but it also
inevitably discriminates against capable individuals, in favour of less
competent family or tribal relations. Unfortunately, its ‘quiet’ nature also
makes it much more challenging to tackle. This must change if Zambia is to make
substantial headway and preserve the unitary state.

So what are we to conclude? As one reflects between the many vices of
corruption, it becomes readily clear that as a nation we face significant
challenges in eliminating corruption. The rise of the political and economic
liberalism in 1991 has spawned a new culture of corruption which has been
overseen by those in power. The new politics brought new electoral competition
which led to greater political bribery and intense lobbying from foreign
investors and other groups. Privatisation led to culture of
irresponsibility with significant public theft which continues to persist. It
has taken two decades to build a culture of corruption it will take longer to
destroy it. Culture is resilient. We
should be upfront that corruption will always be here. Nepotism, public theft
and other banes will always exist. The question is one of scale. In our reading
of history and the quest to develop mechanisms for combating this social evil
it is vital that we deepen our understanding of the complex issues involved.
Blanket assessment of corruption makes headlines, but it does not help move the
country forward. This essay is an attempt to broaden this understanding and
steer discussion in the right direction. We have become a corrupt nation, and
only with understanding can we begin to reverse the corrupt culture.

Chola Mukanga is an economist and founder of the Zambian Economist which provides independent economic perspectives on Zambia's progress towards meaningful development for her people

4 comments:

I have a problem with the idea of bribes as a moral failure, mainly for two reasons.

1) Wages vs cost of living

If the cost of living is $600 a month, and you're paying someone $200 a month, how are they supposed to make ends meet? Why would they keep showing up at work, let alone full time? If people receive part time wages for a full time job, who is being immoral? You could say that they should be 'selfless' in doing their job, however, when they have responsibilities of their own, like wifes and children, who would go without food or heating, are they being selfless while being selfless?

But is the government being selfless in not paying it's workers their full wage? Especially when they take bribes not to collect taxes, thereby forfeiting the country revenues that should be going to paying the civil servant's wages?

Also, think of it this way - there are parts of the USA where you are expected to tip 20% of the bill. The reason is that the person gets paid very little, and is supposed to make the rest from tips. Waiters, strippers, etc. live almost entirely on tips, and some make a very good living out of it. My question is - how is this different than paying a bribe? If the government pays a civil servant so badly that they need to live on tips, who is being immoral?

At some point, tipping/bribery becomes an alternative system of compensation. It may even have the positive effect of expediting service delivery, or making a civil servant pay attention to what has to be done.

2) Deferring responsibility by government

If the argument is that 'we're a corrupt people', then you're already throwing in the towel. Also, government is no longer responsible, because who can change the heart of man? You would need a second coming of Christ, not better compensation and monitoring of expenditures.

When something doesn't work, but it is done over and over, my first idea is that - it may be a failure, but it is working for someone.

The same with structural adjument programmes from the IMF/WB. No country has ever done well after structural adjustment. The people revolt, economies are destroyed even further, there is massive urbanisation and emigration out of the countryside, the manufacturing base is annihilated. People even vote former communists back in (Daniel Ortega). And all the IMF/WB does is move on to the next disaster. Now at no point in the last two decades has anyone still working for the IMF said - we were wrong, ESAP/SAP/etc. doesn't work?

But it works for someone. It works for the trillionaire bankers who get to privatise state assets and get their hands on mining deposits.

The same with corruption. Corruption benefits the few who have the money to pay, and works against the poor who have the right to expect basic services free of charge.

However while doing so, it maintains the status quo of a poor general population, a small connected national elite and extremely rich foreign mining companies who get far more than they pay, because national politicians are basically providing them with access to wealth they do not own - Zambia's copper belongs to the people of the country, not the party in government or the president.

So what is disfunctional to the majority, continues because it is very functional to the few.

This has nothing to do with moral failings. It is systemic, and it doesn't really matter who is in that system, until someone changes the system without getting killed in the process (Patrice Lumumba, Trujillo, etc).

It is also ideological. The Neoliberal Ayn Rand notion of selfishness and egotism as a virtue, even the highest virtue, that drives society and progress is very easily adopted by those who are just in it for the money.

I don't know if anyone has yet seen the new movie Atlas Shrugged, but it sort of lays out the mindset. As does the movie Wall Street (Charlie Sheen, Michael Douglas, Daryl Hannah) through the Gordon Gekko character, although Oliver Stone is of course much more conscious of the problems with the ideology. The best in my view is at 1990s tv series called Profit, starring Adrian Pasdar, Keith Szarabajka, Jack Gwaltney, Lisa Blount, Lisa Darr, Sherman Augustus, etc. In my opinion the best tv series ever made.

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